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SMM Nickel Market Morning Review (2013-6-19)
Jun 19,2013 10:10CST
price review forecast
LME nickel prices overnight opened at USD 14,288/mt, with the high end of the price range USD 14,288/mt, and finding support at USD 14,037/mt.

SHANGHAI, Jun. 19 (SMM) – LME nickel prices overnight opened at USD 14,288/mt, with the high end of the price range USD 14,288/mt, and finding support at USD 14,037/mt. Finally, LME nickel prices closed at USD 14,131/mt, down USD 80/mt from the previous trading day. Trading volumes increased by 568 lots, to 2,687 lots, and total positions decreased by 2,687 lots, to 121,738 lots. Inventories grew by 2,124 mt, to 185,748 mt.

LME nickel prices overnight opened at USD 14,288/mt, but fell immediately following opening, losing all gains in the previous day in merely an hour, dipping to as low as USD 14,060/mt. LME nickel prices then fluctuated around USD 14,100/mt due to the lack of news. During European and US trading hours, US May housing data fell short of expectations, so LME nickel prices remained low and hit a record low for the year of USD 14,037/mt, and finally closing at USD 141,321/mt, down USD 80/mt.

US Commerce Department reported June 18 that US housing starts in May increased by 914,000 units, with the largest growth in multi-family home starts, but increases were still below expectations. US May construction permits were 974,000 units, compared to the forecast of 975,000, and 1.005 million units in April, with a drop of 3.1% in May and an increase of 12.9% in April. US Commerce Department also showed that US May CPI only rose slightly from the previous month, implying US inflationary pressure is modest while global economic growth and US salary increases slow. As ICSC/Goldman Sachs Chain Store Sales for the week ending June 15 was up 0.3% from the previous week, US economic recovery is expected to continue in the short term.

Germany's ZEW economic sentiment index in June rose to 38.5, with the growth better than expectations, and ZEW June economic sentiment index climbed to 30.6, compared to 27.6 in the previous month. German ZEW President Clemens Fuest stated Germany's economy will grow faster in 2H 2013, with major driving force of private consumption, positive job situations and salary growth. Besides, G8 prompted euro zone countries to build a bank union at the meeting in Northern Ireland, which will positively affect the market in the near term.

State Administration of Foreign Exchange (SAFE) revised current account surplus in Q1 to USD 47.6 billion on June 18, compared to the initial USD 55.2 billion, and revised capital and financial account surplus in Q1 to USD 90.1 billion, compared to the initial USD 101.8 billion. Besides, hot money began to flow out of China, and foreign exchange receipts continued to decrease. Although China can ease liquidity tightness by reverse repurchasing and Short-term Liquidity Operations, market expectations that China will lower deposit reserve ratio increase.

LME nickel prices will move between USD 13,900-14,300/mt today, and spot nickel prices in Shanghai are expected to be between RMB 99,500-101,500/mt.

LME nickel prices

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